EQUAL PAY IS A STEP TOO FAR IN RECESSION

March 16, 2009

The body responsible for safeguarding equality in the UK will tell the government that the economic climate is too fragile to impose equal pay reviews on business.

With women’s pay on average 17% less than men’s and the gap increasing, the Equalities and Human Rights Commission, formed 18 months ago, will say that the reviews should be excluded from the forthcoming equalities bill when it publishes its recommendations.

Summarising the strategy, the (former) chief executive of the EHRC, Nicola Brewer, said an entirely new equal pay act was needed, and called for “radical reform in the future.” This would be a long-term exercise, requiring several years of work. More immediately, the commission’s approach is based on “encouraging” companies to improve their record voluntarily.

The Equal Opportunities Commission, the body which preceded the EHRC, had recommended that companies should carry out equal pay reviews as a first step to addressing disparities. But the EHRC does not want pay reviews to be in the equalities bill, due to be published next month. “They can be a helpful diagnostic tool, but they are not the whole answer. I think we do need to be realistic about the economic climate,” Brewer said.

Pay audits are unpopular with businesses both because they are expensive and because revelations of pay disparities often unleash legal action by women who had not realised they were underpaid.

The focus on what is realistic in the light of the recession dismayed campaigners for women’s rights. “We must not get caught in this trap of saying in difficult times we will trade in women’s rights,” said Katherine Rake, director of the Fawcett Society.

Sarah Veale, head of the equality department at the TUC, said pay audits were “a crucial part” of eliminating the pay gap. “Until companies are forced to shine a light on where the anomalies are, you can’t address the problem,” she said.

Bronwyn McKenna, a director of Unison, said she was “very sceptical about any measure that doesn’t actually compel any employers to do an audit”. “The voluntary approach simply hasn’t worked,” she said.

Despite the government’s commitment to eliminating it, the pay gap rose slightly last year and women working part-time are now paid on average 36.5% less than men. The forthcoming equalities bill had been welcomed by the EHRC and campaigners as a “significant opportunity” to tackle the problem but there is concern that the measures on equal pay have been watered down, amid inter-cabinet tension over the cost of reform.

The draft bill published last June promised that equal pay audits would be considered, but that element of the legislation is understood to have been dropped after consultation with the Confederation of British Industry. The Government Equalities Office would not comment.

The EHRC will propose a more holistic approach to addressing the gap, and wants to promote better flexible working opportunities to ensure that women who return to work after having children are not forced to “trade down”. Research shows that the disparities in pay become even starker when women reach their 30s and take part-time work to fit in with childcare.

Recognising that an explosion in litigation over unfair pay has “brought the employment tribunal system to its knees”, Brewer also called on the government to allow representative actions on equal pay, allowing tribunals to consider pay cases concerning a large number of women collectively. The measure would help clear the backlog in claims for compensation over unfair pay, caused by a 500% rise in cases lodged over the past four years.

She described the current legislation as “unfit for purpose”. “There are instances of women going through the courts who have died before there’s been a settlement,” she said.

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